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Thursday, December 8, 2011

SPX and Dow Update: Just the Fax, Ma'am

Alrighty then. Apparently, the hours I'm keeping have become too much for my body these last few days. Many apologies. Here's the charts I finished last night before falling asleep at my computer for the 3rd night in a row. :(

The first is a big picture SPX chart, and shows what the market is up against at this level:

The second is a chart of the Dow, which shows my preferred view of the current market. I believe the market has formed an ending diagonal here, and the next move should be lower -- ideally into the blue target box.

What I've been unable to determine is whether the rally is a three-wave move, or a five-wave move. The three-wave interpretation would imply that the November lows will be taken out in the near future (shown as the blue 2). The five-wave interpretation would imply that there's a correction coming, followed by more upside (shown as the red A).

Below is a close-up of how to count the Dow chart and rally as being part of a bearish corrective three-wave move. The gap open on December 5 does create something of a question mark within the count.

Below is the SPX chart, which reflects similar ambiguity, it is also labeled to reflect the three-wave interpretation -- in other words, it shows how to count the diagonal as part of a three. In both cases, assuming my ending diagonal labeling is correct, there are lower prices due immediately.

So, in conclusion, I remain long and medium term bearish, and am now solidly short-term bearish as well. The form taken by the (assumed) coming decline should help determine whether the recent highs are all she wrote, or if there's one more new high coming before the big leg down starts. Trade safe.

Lower prices due immediately, written 2 hours and 10minutes into the trading day. The dog ate my homework and I fell asleep at the computer. Take yourself in hand and cut out the internet porn. People expect prompt updates . Isthis supposedto be a professional endeavour of your hobby? You are asking for donations...so what are they paying for?

Sorry about that pr*ck. Water off a duck's back. Many of us appreciate and many of us have actually read your prior posts and know that you didn't magically turn bearish 2 hours into the trading session.

If you're not part of the solution with your "people who are paying you who aren't me are expecting something" -- then you're part of the problem. Not exactly rolling in dough over this "hobby" that's destroying my body right now.

pretzel - if there is a chance you will fall asleep at your computer again (which is probably likely) you might consider putting an alarm clock on your desk that goes off 10 minutes before the open. So if you are there...you'll wake up. Just a thought :)

new to this blog, but following for the last month or so, two questions: 1. what are your time frames when you say short-trm, medium-term, and long-term 2. assumimg one more leg higher how low do you expect the spx to go before going up short term, have dec puts trying to decide when to close

Here's the thing Rock -- I already did that. It isn't waking me up these last couple days. I just really need to get some good sleep this weekend. 3-4 hours a night for however-many months is too much to handle apparently.

Anyhow, Pretz, thanks for the update. I have been amazed that you have actually been able to keep up the blog with the amount of sleep deprivation that you have. I mainly lurk, but have learned so much in the past month since I've been following the blog and all the folks on here. Appreciate all the commentary and feedback (well, almost all). Just wanted to reiterate my thanks, and I am sure there are many lurkers like myself hanging out and trying to learn this trading biz.

I do genuinely apologize for my inability to keep my eyes open these last few days. A little catch-up sleep is apparently something I desperately need right now. Should get it straightened out this weekend. I'm very sorry for the update delays the last 3 days... had a perfect track record up 'til then, and I'm quite annoyed with myself.

PL... as always, thanks for all your work and sacrafice. Do yourself a favor and schedule some time with EVERYONE that is pulling on you... including yourself and get some sleep. Would hate to see you blow a gasket! When all this really started getting crazy several months ago, I was also working on a few hours of sleep a night and it makes you goofy.

The last couple of months (actually, pretty much since I found your blog), I've calmed down and actually have mostly green on my tally sheet. Probably calmer cause I've found out that I'm not the only one that sees the long term outcome of all this as ... not great shall we say.

Tomorrow might not be the best day to sleep in... but definately find one that works, grab some ear plugs and put a do not disturb sign on the door!

Have to say that I, and I'm sure most here, am thoroughly amazed at your quality of work even with the lack of sleep... I'd have a hard time doing 1st grade math!

I know you're trying to balance lots of different demands. Staying on top of the markets and charting for your own reasons, the blog, keeping the wife at ease and trying to do it while hopefully keeping everyone happy sane and healthy while in Hawaii. I know the pressure is on for you to leave there.

I doubt this will mean much to you but like many people I suppose, I too have thought about living in Hawaii. At least until my most recent visit in which I somewhat experienced it. That trip wasn't my first to HI, but was the first to Maui. When we first arrived in Maui, we stayed at the Grand Wailea and during that time I kept thinking how awesome it would be to live in Maui. For the remainder of the time on Maui, I rented a home in Kihei.

It wasn't until staying in Kihei that feeling wore off. We used the kitchen, so we had to buy groceries & clean up the place. We even managed to get stuck in awful if not rare traffic jam going to Lahaina. Somehow while doing those routine things I could understand "island fever." Not saying you're experiencing the fever, but it sounds as though wifey is.

I know you've said it was a dream of yours to live there, but somehow I don't think your dream included some of what you're experiencing. And there's no other way to say it, but that isn't the best place for this particular endeavor.

Personally, I don't like much about Kihei. It's an ugly town, the weather is non-stop HOT, hardly any rain... just really hated it there. Lahaina is nice, Kula (where we live now) is nice. Kihei, no thanks.

PL, AWESOME!!! SPOT ON. Sorry for yesterday's 3 vs 5 wave down question. I guess I am as confused as anybody else with this +/- 20 points side way action over the last 5 days, hence my question. I'd like to see below 1240 prints before calling it. Not much follow through on below 1245 IMHO.

Given the last week's range, 1,240 is now the line at which it becomes apparent that the game is up and the rally is over.

A decisive break lower from here quickly leads to questions of do we stop at 1,220? 1,200? A break below 1,180 again?

I think the only thing holding the market up here right now is that the Euro summit has not concluded and the FOMC meeting next week. Maybe something more will be offered to bulls out of either one of those.

Short of a bond buying spree or another round of printing and CB intervention, I expect the market to sell off pretty hard pretty soon. Certainly if the next thing that Ben says is that nothing is changed interest rate or QE-wise. Which now seems rather likely.

This is looking North, you can see how the sun hits the West Maui mountains as it rises -- the big shadow at the bottom is from the mountain I live on the slopes of (Haleakala). The shadow vanishes after the sun comes up fully. It's a 10,000 ft. mountain -- we live about 3,000 feet up the side.

Yep, good eye -- that's Kihei in the lower left. Dunno about the bike path -- we live off the main road, so they don't come past our street. And of course, since we live here and take it for granted, we've never done half the tourist stuff we probably should try at some point.

lol- I sold those puts a while back -- but looking at the chart, if Shatner can't continue negotiating prices about 472 (which I don't think he can), then look out below. Bottom could fall out below 472.

They've already spoken - all steak and no sizzle. They are taking the long term, responsible approach - not the Bernake quick fix/fail route. Germany calls the shots there and they are fiscal conservatives

One other way to look at this: Bulls have to mount a defense somewhere. And bears are CLOSE to having accomplished what they needed to completely deflate bull confidence. A close below 1,240 today would be very encouraging.

By biggest concern (at this point) is that with the Euro summit not yet concluded and the Fed having not announced, there is still time for another stick save move. But those don't usually come until we are at the edge of the precipice. Which is not what this is.

lol- I love Disqus. Now the Maui pic will come up everytime I post today. Actually, now the Maui pic and the old trendline will come up today. Gonna have the OTCAMPLF (Old Trendline Chart And Maui Pic Liberation Front) on my back soon...

Agreed. Covered some to lighten up into tomorrow. Missed the current lows of the day but got pretty close. Will have to reassess overnight. I might put in some futures orders overnight (don't trade ES that much), that way I won't miss the gap one way or the other if the news storm starts before our open.

Would be interested in hypothetical sell stop and buy stop levels tonight. :)

I'm rather curious and waiting to see what the last hour of trading holds.

Do bears let bulls it take back up a few points to lull everyone into thinking that the rally can be saved? Or do they press forward in the closing hour to really start the bulls a panicking.

If I'm thinking about the absolute smartest IT move, I'd wait until Wednesday before lowering the boom on this rally. Beacause that we've heard from Ben, all the meetings are wrapped up, and the news is out. And the current 'lay of the land' is pretty well announced by the PTB.

Until then there's a chance that a strong move downward is reversed by Ben or Draghi or the IMF making some dramatic announcement.

Hey, buttho PL, how could you confuse ME, for 'illiterate bum'. I'd rather be dead, than be your father, hommo.Nice view, though, where did you steal the dough to buy it? I underestimated you, you're a crook, just like ME.You're rich, had no idea. Cannot understand how a rich man let's wife order him around, unless she's a cashcow.

So hey, whatever, drop dead, write, blahblah, PENDEJO imbecile. I got 6 days left for MY crash. Shifted some gold shhtt around today, so I survive 1 more month, even if I'm wrong, short-term."F*uc off", you say, to ME? Finally starting to make you a MAN, I see, maui p.c. neutered turkey.

Hey Pretz, Bengal here. Been on the sidelines for the past two weeks, but tried to "Name My Own Price" on PCLN yesterday. Cap'n Shatner feel asleep at the wheel the moment I shorted, but I'm going to be patient because The Negotiator has always come through for me. Juan, you be patient too (with a reasonable stop-loss, of course). Cheers, Bengal.

Okay, that was either an expanding ending diagonal fifth wave, in which case we're headed higher for the rest of the day, or another nest of 1-2's, in which case, we should be zooming lower after we break that low. Hard to tell yet.

You erased MY TRUE prior post, as always, Fahgot MORON, or your boss of a bitch wife did.Some mental retard copied MY ANON20 name, and wrote some crap, I don't even understand.But I get point, no problema, as it was almost certainly YOU that did it, IDIOT BITCH PRETZEL SHIT.

Honestly, it's been so long since I've had to "lock in" to a position, I forget what it's like, and I don't always look at charts that way. Since yesterday's discussion, I'm going to keep that in mind in the future -- but I'm a little rusty in that regard, so bear w/ me for a few days until I get get my thinking back into that mode a bit more.

I'm going to try to keep that type of trading in my thoughts in the future, though.

if you can trade this market intra day or. if you have the balls to hold, overnight, play on. I cant believe our entire financial markets are being dominated by rumors that get rejected every 3 mins. Zero stability~!

Redrum, re: "you are totally right, i need to adjust my trading style. if i just held my positions i'd be golden, rather than getting in and out."

It all depends on how and where you get in and out. I picked up an extra 5.75 ES points today by covering at support, then shorting again at higher levels. That's also how you protect profits -- had the market moved against me there, I'd have "saved" an extra 5.75 in profit.

And just so you know that I *did* have those charts done and saved to my computer last night, here's what they would look like if I hadn't... stockcharts updates everything in real-time, including annotated charts.

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